USDA may have given $22 million in subsidies to dead farmers

Jul. 30, 2013 - 12:54PM
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The Agriculture Department may have doled out millions in subsidies to dead farmers, according to the Government Accountability Office.

GAO reviewed crop insurance data from 2008 to 2012 and found that $22 million in subsidies and allowances may have been provided on behalf of about 3,400 program policyholders two or more years after death. GAO said USDA’s Risk Management Agency, which administers crop insurance programs, does not have necessary controls in place to prevent improper subsidy payments on behalf of dead farmers.

“Many of these subsidies and allowances may have been proper, but without reviewing each subsidy and allowance made on behalf of deceased individuals, RMA cannot be certain that these subsidies and allowances are proper,” GAO said in a report made public Monday. “In addition, without accurate records of which policyholders are deceased, RMA may be less likely to rely on results from data mining ... and therefore be less likely to detect fraudulent, wasteful, or abusive crop insurance claims.”

GAO found similar problems in other USDA agencies. A review of records covering fiscal 2008 to April 2012 estimated that the department’s Natural Resources Conservation Service made $10.6 million in payments on behalf of 1,103 dead farmers one year or more after their deaths. In addition, the report noted that while USDA’s Farm Service Agency has improved its oversight, it still has more work to do. GAO said measures put in place by FSA have enabled the agency to identify thousands of deceased individuals who were improperly paid $3.3 million after their dates of death, of which $1 million has been recovered.

Still, the payments to dead individuals are small compared with the size of the government-operated subsidy programs. GAO said in 2012 that RMA provided $8.3 billion in subsidies and allowances for crop insurance, NRCS provided $4 billion for financial and technical assistance in conservation efforts and FSA provided $7.4 billion for farm commodity and conservation programs.

In a letter, USDA said it “generally agrees with the report’s findings and recommendations.” Still, the department said the appearance that USDA’s NRCS and RMA have no procedures in place to identify deceased individuals “is inaccurate.” USDA said operating procedures in place provide opportunities to identify deceased participants.

The report comes as Congress looks to trim billions of dollars in farm subsidies while writing a farm bill as part of a governmentwide effort to cut spending. The current farm bill expires Sept. 30.

“This irresponsible use of scarce taxpayer dollars reinforces just how broken the system is and how badly it is in need of reform,” said Scott Faber, a senior vice president of government affairs with the Environmental Working Group, an advocacy group. “Congress has an opportunity to fix this wasteful spending in the next farm bill. There’s never been a better time for reform.”

It’s not the first time the USDA has been found to have paid farm subsidies to dead farmers. An earlier GAO report found that the government paid $1.1 billion in subsidies to 172,801 dead individuals between 1999 and 2005. Forty percent of the money went to people who had been dead at least three years.